Hacker News Reader

Comment by tomp | Hacker News Reader

The real answer:

If CloudFlare serves a lot of traffic (i.e. people on the internet are requesting stuff from CloudFlare's servers), they get better peering agreements (i.e. pay less) from internet network providers.

When "normal" people/companies connect to the internet, they're paying for the connection. Regional ISPs likewise pay Tier 1 network providers (i.e. "global internet backbone") for the connection, and are charged by bandwidth. When "popular" companies connect to the internet, they don't pay - e.g. a lot of ISPs would host Netflix servers for free (that way, they avoid having to pay for Netflix traffic to Tier 1 providers, but can serve it locally instead).

See: https://en.wikipedia.org/wiki/Tier_1_network

View on HN

I can sort of intuitively see why that's the case, but any concrete or specific reasons on why "popular" companies don't pay?

The linked Wikipedia article doesn't really explain the reason behind it.

They still pay for transit (Tier 1 providers) but they just refuse to pay for peering to eyeball ISPs. They just don't because they know if they are big enough the eyeball ISP is basically forced to offer them zero settlement (free) peering. If the ISP doesn't he has to pay for transit too and if there is some congestion in the path from the content provider to the ISP his customers are going to complain to the ISP that youtube is buffering and not to google. The content providers have a bigger lever so they don't pay.

Thanks. I think I have a better understanding now (those concepts like transit, peering are still hard to grasp for me as an outsider). Basically if you host content that many consumers want, you have leverage against ISPs?

Say you run a small ISP. You pay for (and utilize) a 10Gbps link to the internet from a big ISP: Cogent, maybe.

You look at your network traffic and notice 5Gbps of it all seems to be going to a single AS: Google. Your customers just love Youtube, and they are pulling down a ton of video.

Rather than leaving that as an interesting factoid, you decide to reach out to Google and pitch them on cutting out Cogent. You run a cable (more-or-less literally) from your network to Google. That 5Gbps of Youtube traffic is running over your connection directly to Google.

Now you can go back to Cogent and drop your commit from 10Gbps to 5Gbps, saving you a bunch of money. Google doesn't have to pay them for transit either: they can serve content to your users straight through the cross-connect. Win-win.

If a particular company is _really_ big, say: Netflix, Cloudflare, etc: you, as a small ISP, might even offer to give them some space in your server racks to host local caches. This makes the performance better for your customers, and, again: saves transit costs.

Really good explanation. Thank you!

Reply on news.ycombinator.com